Bank of America Securities has released a research report downgrading its investment rating on Times Electric (03898.HK) from "buy" to "neutral", as it expects the growth rate of the company's power semiconductor business, especially IGBT modules, to slow down in the next two years as the market supply and demand seem to return to balance.

The bank also believes that the short-term bullish factors in the railroad equipment sector, reflected in the performance of Times Electric's H shares, which have risen by 39% from the beginning of the year, have been largely priced in. Accordingly, it has lowered the target price from 32.8 yuan to 31.7 yuan, expecting short-term pressure on the price of IGBT modules. It now predicts that the gross margin of the company's emerging equipment business will decrease from 28% in 2023 to 27% and 26% in the next two years.